Governor Dannel P. Malloy today announced that the State of Connecticut will be acquiring two office buildings within the downtown Hartford area in a move that will save the state over $200 million over the next twenty years by decreasing the state's reliance on leased offices and avoiding costly renovations to existing property.
Plans include the purchase of the building at 55 Farmington Avenue, currently owned by the Hartford Insurance Company, and 450 Columbus Avenue, the Connecticut River Plaza. Combined, the two buildings, purchased at a cost of $52 million, will provide the state with nearly 900,000 square feet of office space. Recently consolidated agencies and other state entities will be re-located to the buildings.
"The purchase of these buildings will save the state millions of dollars and provide an economic boon for downtown Hartford," said Governor Malloy. "Over the last year and a half, we have looked for the best way to collapse leases into more affordable state-owned space and to develop a cost-effective alternative to required, costly renovations at existing state-owned property. With the purchase of these two properties, we'll do just that while making an unprecedented investment in our Capitol City."
Department of Administrative Services Commissioner Donald DeFronzo said, "The Governor asked us to find ways to save money in our facilities budget, so we undertook what became an almost two-year process during which we analyzed the financial and market conditions, conducted due diligence on the buildings and assessed a variety of options to achieve the goals of the project. I think we have delivered a cost-effective solution that well serves the state and the city."
It is estimated that expenditures in downtown Hartford from state employees and visitors to the buildings will have an estimated $11 million economic impact annually in the area.
"The state's acquisition of these two buildings will do several meaningful things: (1) increase foot traffic and generate greater vibrancy in downtown Hartford and (2) reduce the amount of Class A office space by approximately 10 percent and generate greater demand for the space that remains," Hartford Mayor Pedro Segarra said. "I am grateful that the Governor and his administration recognize the importance of the Capital City as the state's governmental hub. Coupled with several new development projects, including 1,000 units of housing, this announcement represents another significant step forward for the City of Hartford."
Funding for the acquisitions and associated costs will be placed on the agenda for the March 13 special meeting of the State Bond Commission.